Land Transfer Tax

UPDATE: The deadline for feedback on the Ministry of Finance’s consultation document has been extended. Submissions must be received on or before September 8, 2017.

The Ministry of Finance is reviewing the land transfer tax (LTT) applicable on unregistered dispositions of a beneficial interest in land in order to improve administrative effectiveness and enforcement, and to ensure the integrity and equity of the LTT system. At this time, the Ministry has posted a consultation document on the Regulatory Registry, which sets out a proposed approach to facilitate the payment and administration of the LTT under section 3 of the Land Transfer Tax Act in certain circumstances. The Ministry is requesting your feedback on or before September 8, 2017. For further information, please see Ontario's Regulatory Registry.

Effective April 21, 2017, a 15% tax is imposed on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) or taxable trustees. The Non-Resident Speculation Tax applies in addition to Ontario's current Land Transfer Tax.

Ontario Regulation 70/91 made under the Land Transfer Tax Act has been amended to clarify how the 'de minimis' partnership exemption applies to certain dispositions of a beneficial interest in land, including those occurring in respect of complex real estate structures involving real estate investment trusts and/or layer(s) of limited partnership(s). Information on the amendments may be found in the Regulatory Registry.

Information may also be found on our web page entitled, Land Transfer Tax De Minimis Partnership Exemption: Clarifying Amendments for Certain Dispositions. NOTE: This web page was revised on June 20, 2017 to extend the Special Voluntary Disclosure Policy (SVDP) to August 31, 2017. The SVDP applies only to dispositions that occurred on or before February 17, 2016. For dispositions on or after February 18, 2016, the SVDP is not applicable, and returns and remittances continue to be due the later of the 30th day after the date of the disposition and January 1, 2017.

When you buy land or an interest in land in Ontario, you pay Ontario's land transfer tax. Land includes, but is not limited to, any buildings, buildings to be constructed, and fixtures (such as light fixtures, built‑in appliances and cabinetry).

Who pays land transfer tax?

When you acquire land or a beneficial interest in land, you pay land transfer tax to the province when the transaction closes.

Land transfer tax is normally based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land.

In some cases, land transfer tax is based on the fair market value of the land, such as in the following examples:

the transfer of a lease with a remaining term that can exceed 50 years

the transfer of land from a corporation to one of its shareholders, or

the transfer of land to a corporation, if shares of the corporation are issued.

Calculating the tax amount

Providing additional information

The Minister of Finance has been granted the authority to make a regulation regarding the collection of additional information about the transferee and the transfer of land from everyone who is required to make land transfer tax statements, file a land transfer tax affidavit, or file a Return on the Acquisition of a Beneficial Interest in Land.

The minister may use the information for the administration and enforcement of the Land Transfer Tax Act. In addition, the minister may use the information, without personal identifiers, for the purposes of compiling statistical information and for developing and evaluating economic, tax and fiscal policy.

The requirement to provide additional information will not be in effect until the minister files such a regulation, and the requirements in the regulation take effect.

First‑time homebuyers

If you are a first‑time homebuyer, you may be eligible for a refund of all or part of the land transfer tax.

Other land taxes

Local municipalities charge a tax on the residential or business property you own. If you have questions about municipal property tax, contact your local municipality. If your property is located in an unorganized territory (an area without municipal organization) of Ontario, property tax is collected through the provincial land tax program administered by the Provincial Land Tax Office in Thunder Bay.

Harmonized sales tax

The harmonized sales tax (HST) applies to newly constructed homes or substantially renovated homes, but does not apply to resale homes. Buyers of new homes may receive a rebate of up to $24,000 of the provincial portion (8%) of the HST. If you have any questions about the HST rebate please contact the Canada Revenue Agency at 1‑800‑959‑1953.

Paying the tax

Ontario's land transfer tax is payable when the transfer is registered.

If the transfer is not registered within 30 days of closing, you must submit a Return on the Acquisition of a Beneficial Interest in Land form to the Ministry of Finance, along with the payment of tax within 30 days after the closing date.

Some person(s) do not pay land transfer tax on certain transfers of land. The exemptions include, but are not limited to:

certain transfers between spouses

certain transfers from an individual to his or her family business corporation

certain transfers of farmed land between family members

certain transfers of a life lease from a non‑profit organization or a charity.

A deferral of land transfer tax may be available when land is transferred between affiliated corporations, and notice of the transfer is not registered on title.

General anti‑avoidance rule (GAAR)

Bill 14 Building Opportunity and Securing Our Future Act amended the Land Transfer Tax Act to set out a general anti‑voidance rule. This rule applies to transactions that are completed after May 1, 2014. It also applies to transactions that occurred on or before May 1, 2014 if they are part of a series of transactions that is completed after May 1, 2014.

Overpayment and refunds

If you overpaid land transfer tax, you can ask the Ministry of Finance for a refund. To request a refund, follow the steps below:

Write a letter explaining the reason for your refund request and include:

a copy of the registered conveyance

evidence of the amount of tax paid on registration

a copy of the agreement of purchase and sale (including all schedules and amendments), and

Time limits

There is no time restriction where a refund is requested for land transfer tax paid on registration of a notice or caution where the transfer contemplated in the agreement referred to in the notice or caution did not take place.

First-time homebuyer refund requests must be made within 18 months after the date of the transfer.

All other refund requests must be made within 4 years after the date of payment of the tax.

To obtain the most current version of this document, visit ontario.ca/finance and enter 50 in the find page field at the bottom of the webpage or contact the ministry at 1 866 668-8297 (1 800 263-7776 for teletypewriter).